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PharmAla Biotech announces Non-Brokered Private Placement Offering of up to an Aggregate of $5,000,0

In an ever-evolving financial landscape, innovative strategies are key for companies seeking growth. PharmAla Biotech, a renowned name in the biotech industry, recently announced a groundbreaking financial maneuver: a Non-Brokered Private Placement Offering.

The Concept of Non-Brokered Private Placement Offering

The Non-Brokered Private Placement Offering is an innovative financial instrument that allows companies to raise funds from investors directly, rather than relying on intermediaries such as investment banks or brokers.

class NonBrokeredPrivatePlacement:
    def __init__(self, company, investors): = company
        self.investors = investors

Understanding PharmAla's Strategy

PharmAla Biotech aims to accumulate up to an aggregate of $5,000,000 through this offering. The mechanism behind this strategy is both intriguing and innovative.

The Warrant Acceleration Clause

PharmAla has introduced an interesting clause in their strategy: The Warrant Acceleration. This comes into effect if, within two years post the closing date, the volume-weighted average trading price of the common shares surpasses $0.675 per common share for 20 consecutive trading days.

PharmAla reserves the right, following such 20-day period, to hasten the expiry date of the Warrants. This is executed by issuing a press release, referred to as a Warrant Acceleration Press Release. Consequently, the expiry date of the Warrants would be 5:00 p.m. (Toronto time) on the 30th day post the issuance of the press release.

Allocation of the Net Proceeds

PharmAla has clear plans for the net proceeds from this offering. The funds will be utilized to:

  1. Enhance its inventory of MDMA and psilocybin for future sales, both within and outside Australia.

  2. Finance phase 2 clinical trials of the company's patented ALA series of molecules.

  3. Serve as general working capital.

Compensation for Eligible Finders

The company may compensate certain eligible finders under the offering. This compensation could be a cash commission of up to 7% of the gross proceeds and issuance of finder's warrants equal to 7% of the total number of units issued.

A Closer Look at the Legal Aspects

PharmAla's offering involves certain legal aspects worth noting.

Related Party Transaction

The participation of company insiders in the offering could classify it as a related party transaction under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions. However, the company expects the offering to be exempt from the requirements to obtain a formal valuation and minority shareholder approval. This is because the fair market value of the insiders' participation is projected to be below 25% of the company's market capitalization.

Compliance with the U.S. Securities Act

The securities have not been registered under the United States Securities Act of 1933 or any state securities laws. As a result, they may not be offered or sold within the United States or to U.S. persons unless registered under the U.S. Securities Act and all applicable state securities laws, or an exemption from such registration requirements is available.

"This press release does not constitute an offer to sell or a solicitation of an offer to buy any Units within the United States or to, or for the account or benefit of, U.S. persons."


PharmAla Biotech's non-brokered private placement offering represents a strategic move in the company's growth trajectory. It not only provides an innovative mechanism for fund accumulation but also underlines the company's commitment to its growth and development objectives.

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